1. Land transfer tax. The government may charge land transfer tax when you buy a property. The tax is based on the home’s purchase price. Most provinces charge provincial land transfer tax, but some cities charge their own municipal land transfer tax as well. Taxes vary by province and first-time home buyers may sometimes receive a rebate for part of the cost.
2. GST or HST. GST is a federal “value added tax”. Usually, real property in Canada is taxable, including newly constructed or substantially renovated residential homes. Used residential homes aren’t subject to GST. HST on Real Property applies in provinces that are harmonized with the GST. If you pay GST and HST on newly constructed or substantially renovated residential homes, you may qualify for a “new housing rebate”.
3. Property taxes, utilities and condo fees. The seller may have prepaid property taxes, utility bills, or condo fees before you take ownership of the property. You reimburse the seller for the prorated portion of the costs from the closing date forward.
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